Large Cap Core (formerly known as Enhanced Large Cap)
as of March 31, 2014
Fund Commentary
After a strong 2013, the U.S. equity market (S&P 500®) slowed down in the first quarter of 2013. Investors absorbed the U.S. Federal Reserve’s (Fed) tapering of quantitative easing, Janet Yellen’s taking of the reins at the Fed, severe weather across the U.S., and Russia’s aggression in Ukraine. The U.S. equity markets remained near record levels as fourth-quarter corporate earnings surprised to the upside, sales growth was strong, manufacturing productivity remained positive, and labor costs declined. Elsewhere, Europe continued to recover from a deep economic recession, and a slowdown in China increased volatility in the emerging markets.

The Fund posted a total return of 3.12% for the quarter, compared with 1.81% for the Fund’s benchmark, the S&P 500® Index. The change in market leadership benefited the Fund’s performance, aided primarily by stock selection in the consumer staples and industrials sectors. Stock selection within the information technology sector slightly detracted from performance.

Economic growth projections for the first quarter were revised downward, taking the weather disruptions into account. We believe stronger macroeconomic data on spending and manufacturing should create a favorable environment for stocks this year. In addition, it’s unlikely any major legislation will pass until after November’s mid-term elections. Overall, investors remain concerned about further economic cooling in the larger emerging markets, particularly China, and the impact of higher taxes in 2014.

We believe the outlook for risk-taking will continue to improve, as better economic data are released. We believe the Fund is well positioned as investors move beyond the broad economic data and refocus their attention on company fundamentals.
Investor Profile

If you're seeking a low cost, disciplined approach to investing in equities, this fund may be appropriate for you. It seeks long term growth of capital and dividend income and invests primarily in a broadly diversified portfolio of established, large-cap companies. The Fund is intended for use as a core equity investment.

  • Use a multi-factor proprietary quantitative stock selection model with the goal of providing additional total return versus the S&P 500® Index.
  • Create a portfolio with risk, style, capitalization and characteristics similar to the S&P 500® Index while potentially providing excess returns by overweighting or underweighting stocks that have the potential to achieve the Fund's objective.
  • Sell securities when they are no longer attractive based upon evaluation criteria, such as valuation, price momentum and earnings quality.
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Not FDIC insured | May lose value | No bank guarantee

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Please carefully read the prospectus and summary prospectus and consider the investment objectives, risks, charges and expenses of Northern Funds before investing. Call 800-595-9111 to obtain a prospectus and summary prospectus, which contains this and other information about the funds.

©2014 Northern Funds | Northern Funds are distributed by Northern Funds Distributors, LLC, not affiliated with Northern Trust.